THE DANGERS OF BEING IN DEBT TO THE MUNICIPALITY:

For those consumers in debt and failing to respond.

FACTS:

Under South African law the municipalities are obliged to recover costs from property rates and services provided to fund service delivery.........even if the municipality fails to send an account.

Under the same law, the debt belongs to the property and it's the owners full responsibility to ensure the municipality is paid in full, on time, all the time.

The prescription period for services such as water and electricity debt is 36 months, 30 years or longer for rates .... So the debt can never go away.

Furthermore, the debt for services can be rolled over for the full 30 year period, even if the services have been fully suspended.

If the debt is ignored, the municipalities will be forced to sell the property to settle the outstanding debt........it's the Law and this can happen at anytime, especially if the municipality is short of funds.

Under this same law, the municipalities are not allowed to write off debt, however they can from time to time offer early settlement discounts to correct an account if arrears.. If applied early, the only penalty applicable will be a "reconnection fee".

Should a early settlement discount be granted: its again the owners full responsibility to ensure this is in writing, otherwise, the debt can be reinstated for another 30 years by any incoming government during the 30 year period.

Its important to correct the account early before selling the property, otherwise the municipalities will no reason to offer a settlement discount as they are fully entitled to recover the full amount plus interest from the value of the property.

The Deeds Offices is a independent directorate of the Department of Land Affairs, a completely separate sphere of government to that of the municipalities and have no influence on municipalities finances, but do have all the say on the value of the property.